The country’s largest online retailer by sales has raised $150 million from existing investors Accel Partners and Tiger Global Management Llc, two people with knowledge of the matter said, asking not to be named. One of them, a private equity (PE) investor, said the capital infusion values Flipkart.com at around $850 million.

This is the fourth round of funding for Bangalore-headquartered Flipkart, which began operations in 2007. The company raised $31 million collectively in the previous three rounds.

Flipkart.com, which sells products ranging from books to mobile phones, computers, television sets and home appliances, had initiated discussions for fund-raising last year with PE firms, including General Atlantic and Sequoia Capital India. The talks, however, failed because of differences over valuation, said an executive at one of the two firms. “We did examine the assets, but they were commanding a steep valuation, which didn’t seem okay for us,” the executive said, declining to be named.

Sachin Bansal, chief executive of Flipkart, said in response to an email query on the latest investment that the company is in touch with investors on a regular basis. “We will be unable to comment,” he said by phone.

An email sent to General Atlantic remained unanswered. Prashanth Prakash, partner at Accel Partners India, declined comment, as did Sequoia. Tiger Global, the American hedge fund that manages over $4.4 billion in global assets, said it had no comment at this time.

Late last year, Accel raised a new $155 million venture capital fund for seed and early-stage investments in India. With the Accel India III fund nearly two-and-a-half times the size of the firm’s second fund ($60 million), Accel’s total assets under management in India have reached $235 million.

Flipkart’s revenue has soared this year. From Rs 11.6 crore in 2009-10, cumulative revenue in the year ended March jumped to about Rs 50 crore, Bansal said in the email. For this fiscal year, Flipkart is “on its way to close with over Rs 500 crore”, he said.

This forecast, however, is lower than his earlier projection of more than Rs 600 crore for the year, a figure he had cited in an interview with Businessworld in August.

The company is quite confident of reaching the $1 billion valuation mark in two years, Bansal said in the email.

Flipkart’s fourth round of capital-raising has come at a time when a section of the investment fraternity is turning sceptical about the e-commerce space in India. In a December report, Mint detailed the challenges that have led to a number of e-commerce start-ups shutting shop. Lack of a differentiated model and overcrowding have forced online stores Taggle.com, Nammagroceries.com and Harisabzi.com to discontinue operations.

“While there are challenges in the space that Flipkart operates in, there is room for another three-four players,” said Arvind Singhal, chairman of Technopak Advisors Pvt. Ltd, a retail consultancy. Flipkart is present in 12 categories and plans to add more products, barring automobiles and groceries, Bansal said in the email.

Companies and investors in e-commerce have their hopes pinned on the growth of Internet users in the country. According to an estimate by the Internet and Mobile Association of India, online shoppers in the country will treble to 54 million by 2015. First Data Corp. and ICICI Merchant Services, in a December report, estimated India’s e-commerce market to have grown to about Rs 50,000 crore from about Rs 19,688 crore in 2009.

Last year, online retailing in India saw a number of venture capital and PE investors infusing $500 million into the space through 67 deals, according to VCCEdge, an online tracker of investment activity. In 2010, there were 18 investments worth $112 million.

Even if Amazon.com Inc., the US’ largest online retailer, enters the Indian market, there is no reason to believe it will eat into the business of Indian sites, Singhal said. “In China, Brazil and Russia, local e-commerce sites are doing well alongside global competition. There is no reason why this can’t be the case in India as well,” he added.